Why it was good to separate London’s airports

PublishedSeptember 30, 2013

Many questioned the idea of Heathrow and Gatwick being put under separate management. Turns out it was a very good idea because nothing makes things work better than competition. Right now the two airports are fighting over the chance to grow. This would never have happened when both airports were run by the same company (BAA).The competition between these two London airports is important. London is already at or near maximum airport capacity. These two airports are the primary airports for the city. For London to remain a premier international hub, it requires more airport capacity. Indeed, we believe an argument could be made that both airports need to add capacity. But as the city has grown around these large pieces of infrastructure, neighbors want less noise. So even as the argument is for the growth at either, it would be impossible for both to grow.

The airport capacity issue in London attracts attention at the highest levels of government. London’s mayor has an opinion that includes shutting Heathrow. As we have previously opined, London is a key market for the A380 and future VLAs. Fortunately the A380 is already very quiet – precisely so it can serve Heathrow at all hours. This was a request from Emirates that Airbus met.

A quick solution is unlikely to the Heathrow vs. Gatwick debate. There is little argument that London needs more runway capacity. One can expect this back and forth to go on for a while. The longer airport capacity remains constrained in London, the more A380s (and other VLAs) will be needed for service to the city.